12 Sail Drive

Halifax NS B4H 9Z9

Ms. Jean Brodie

Project Officer

Industry Readiness Branch

Industry Canada

123 Charles Street Room 321 C

Ottawa, ON

September 16, 2018

Dear Ms. Brodie:

I appreciated the opportunity to review the needs of Industry Canada in the area of how trade associations outside of Canada encourage e-business development among small and medium size enterprises (SME). The objectives of the following proposal are:

  • to provide a brief background to the study including a description of our understanding of the requirements;
  • to describe the proposed approach with a work plan; and,
  • to describe the project resources, and the suggested commercial arrangement.

Background to the study and our understanding of the requirements

Our understanding of the requirements to the research project are based on three components: 1) a preliminary review of the grey literature available on the Internet; 2) a review of the available literature represented by the ABI-Informs database of academic and business publications; and, 3) a useful discussion with Ms. Brodie clarifying a number of project-related questions. A review of the available literature, including the OECD benchmarking study included with your request for proposal demonstrates that the role of e-businesses for SMEs is in its early evolution.

The literature on the phenomenon includes references to G-8 policy, Asian initiatives, and the rise of the Celtic tiger, Ireland. SME e-business has strategic consequences for nations and trading blocks. The Canadian E-business Roundtable has made a clear connection between the future of innovation and e-business opportunities. We conclude from this, there is no question that e-business evolution in the context of SMEs is international in scope.

E-business practices also have significant opportunity to improve industrial efficiencies in many sectors of the economy. Beyond simple efficiency e-business practice can improve the reach of companies and their competitiveness, especially those in the small and medium category. Given the importance of the SME in driving economic growth generally, and employment specifically, advancing the e-business capacity of the SME community is not optional. Two questions immediately emerge: what are the current barriers to progress, and what vectors might best help to overcome these barriers and to advance the e-commerce agenda among SMEs?

The first question is answered in part by a set of studies undertaken by Statistics Canada. These studies demonstrate two disturbing trends: 1) that the uptake of e-business among SMEs in Canada lags our major trading partner, the United States; and, 2) the perceived barriers to entry have not changed materially over the last two years. Leading the list of barriers is the perception that the value proposition for e-business does warrant the change in practices or the investment of time, energy, and money.

Industry Canada has limited resources to be able to change this thinking. The prospects of achieving such a change through direct action are very low. Firstly, the number of SMEs is very large. Secondly, the Department does not have the capacity to develop expertise deeply enough in each and every one of the sectors to be able to have significant impact deeply within sectors as well as across all of the sectors. Faced with these two facts, the Department has identified an alternative – using the trade associations as a way of leveraging the vectors of collaboration already present within industries and sectors to encourage e-business.

There are a number of clear advantages to this approach. Trade associations are natural allies in advancing e-business. They have clear motivation for encouraging it, since this is one of the ways that the association can demonstrate value to its membership. E-business practices also have the potential of making the trade associations themselves more effective. Recognizing this, Industry Canada (IC) has organized a conference on the topic for October 2002. In advance of the conference, IC wants to produce an analysis of existing trade and sector organizations outside of Canada on the basis of two major dimensions:

1)e-business related services (such as training, workshops, direct e-business services, etc.), whether existing or planned;

2)the e-business practices of the association, including an assessment of the maturity of these practices.

The direct benefit of such a study will be to provide Canadian trade and sector representatives some idea of the best practices currently in place outside of Canada. The indirect benefit might include creating an enhanced sense of competitive urgency that could cascade into action on the part of SMEs.

To date, we have not been able to identify much in the way of relevant literature on the relationship of trade organizations or sector councils to the e-business practices of their memberships. This suggests to us there is little in the way of an established methodology in place for undertaking such a study. Our initial analysis predicts that problems around classifications will complicate the work somewhat. For example one of the organizations that represents a very large number of SMEs in Canada is the Canadian Federation of Independent Businesses. Obviously some subset of their membership will be represented by other industry or product specialist lobby groups. We suspect that the picture might be even more complicated where Canadian SMEs might be members of American groups. This preliminary analysis has shaped the work plan we propose to follow.

The Proposed Work Plan

The overall objective is to identify how trade and sector organizations in other countries support their members (especially members which are SMEs) exploit the opportunities of e-business practices, strategies, and innovation. The project requirements document from IC included a list of 14 target sectors in 7 geographical regions. The list will be extended by one to include the very important American experience. Altogether this represents a challenge of identifying data to populate 112 different cells in the required data table.

There is a likelihood that some cells will be occupied by more than one organization. It may even be possible that some organizations might represent SME communities occupying more than one cell. This will require considerable thought. Given that the work we are collectively undertaking appears to have little in the way of precedence, we have designed the following work plan to provide IC significant feedback and a number of opportunities to modify the work as we learn more about the challenges of the project.

Table 1 – Proposed Work Plan

Task / Responsible / Work Hours
(min-max) / Target Date / Deliverable
1. Conduct initial audio conference meeting to confirm work plan and terms of reference. / All / 5 / 7 / July 8 / Changes to work plan and terms of reference as required.
2.Complete initial research to identify population of organizations to survey and the key contact people. A preliminary review of their websites will help to identify issues affecting the survey and data collection process. / Coburg
SM / 15 / 20 / July 18 / Preliminary assessment of issues affecting data collection.
3. Draft survey form for target population to complete. Draft survey form for assembling data related to current e-business practices from websites. / Coburg
SM / 10 / 15 / July 18 / Draft data collection forms.
4. Second audio conference meeting to review proposed list of target organizations, survey forms, and other issues. / All / 8 / 12 / July 22 / Consensus on target organizations and data collection.
5. Modify target list, survey formats required. / Coburg
SM / 8 / 12 / July 23 / Modified lists and survey formats.
6. Review websites and collect preliminary data on current practices prior to interviews. / Coburg
SM / 48 / 60 / July 26 / Preparation for interview program.
7. Distribute survey questionnaires and conduct interviews. Manage survey and questionnaire processes. Complete data collection process and data cleansing. / Coburg
SM / 104 / 134 / Aug. 14 / Collected data from surveys and interviews.
8.Conduct formal website reviews and collect data on nature of services, maturity. / Coburg
SM / 132 / 155 / Aug. 23 / Collected data assessing website maturity.
9. Prepare progress reports and conduct audio conferences as required. / SM
Coburg / 20 / 32 / Aug. 6 Aug. 19 Sep. 9 / Progress reports.
10.Prepare analysis and conclusions. / Coburg
SM / 59 / 91 / Aug. 31 / Completed analysis and conclusions.
11.Prepare and submit draft report. / Coburg
SM / 40 / 55 / Sep. 7 / Draft final report.
12.Review report from IC perspective. / IC / Sep.10 / Recommended changes.
13.Prepare final progress report and conduct final audio-conference. / Coburg
SM / 12 / 18 / Sep. 10 / Final progress report and project wrap-up.
14.Revise final report as required and submit in hard copy and pdf formats. / Coburg
SM / 11 / 15 / Sep. 17 / Final deliverable.
15.Prepare conference presentation / SM / 5 / 8 / Oct. 10 / Presentation PowerPoint.
16.Participate in conference / SM / 10 / 13 / Oct. 17 / Conference presentation.
Total
/ 487 / 627

Legend:

Coburg Coburg Consultants Limited

SMSunny Marche, MMM Management Associates Ltd.

ICIndustry Canada

The success of this work plan assumes a minimum willingness to cooperate on the part of the trade and sector organizations. For example, there may be some reluctance to let our research team look at proprietary e-commerce systems such as those that have been provided to the National Housewares Manufacturers’ Association and the National Association of Manufacturers by e-Society in the USA. By way of incentive to those who cooperate, we recommend that we agree to send them a pdf copy of the final report after the October conference at which the results will be formally presented. Since the outcome of the work will be a public document, there appears to be a limited risk to this approach.

We expect that IC will be able to add significant value in this project by providing a list of the organizations that have been invited to the conference so we can more carefully target organizations to be contacted. Other contacts in Statistics Canada or in the E-business Roundtable that might be able to contribute would be helpful.

At the end of this project, we will have a survey of practices that trade and industry sector organizations in selected geographic areas use to encourage e-business. We will provide an analysis of the general state of e-business practices as demonstrated by these organizations, and offer analysis about the “best practices” demonstrated by those identified in the study. We anticipate that there will be a wide range of practices by trade and industry sectors. Part of the value of this work will be the documentation of the choices open to those who support and represent SMEs in the various industries. The one major specific exclusion to the above work plan is any requirement for translating the survey, reports, and presentations into other languages.

Project Resources and Suggested Commercial Arrangements

The most cost-effective approach to staffing the above aggressive and ambitious project is by combining of the research skills and energy of mature graduate students with the judgment, guidance and experience of a seasoned management consultant. We propose to have the project supervised by Dr. Sunny Marche. As a certified management consultant as well as an academic actively involved in e-commerce issues, Sunny brings a number of skills, attributes and experience of particular value in this context. He is currently the lead faculty of management member at Dalhousie University’s Masters of Electronic Commerce and Executive Masters of Electronic Commerce programs. He is on the executive committee responsible for managing these two innovative, multi-disciplinary programs involving the faculties of management, computer science and law. Sixty percent of his teaching responsibility is in the area of electronic commerce and he has a number of publications and presentations in the area. Dr. Marche has also been extensively involved with working with student e-commerce research at the graduate level.

A recent arrival to the academic world, his previous work experience has been management consulting over two decades including five years experience as a venture capital partner responsible for technology assessment. He has had many consulting assignments in both the public and private sectors. Sunny is quite comfortable working with the private sector, and intimately understands their technology concerns. He has had significant opportunity to speak in public to this community. He has also had line management experience in a high-technology company.

Dr. Marche’s private sector experience includes merchant banking partnership and investment banking, an international management consulting firm, biotechnology companies, manufacturing software, multimedia software company, real estate organization, telecommunication engineering design organization, furniture retailer, data brokerage, publishing, data services firm, petroleum industry, private museum, university finance and administration, and oil and gas lobby organization. His public sector experience includes direct experience or consulting to numerous ministries such as Advanced Education and Manpower, Municipal Affairs, Registries, Environmental Protection, Energy, Forestry, Lands and Wildlife, Public Works Supply and Services, Occupational and Community Health, Health and Welfare, Food and Agriculture, National Defence, Transportation, Power Commission, Attorney General, Mines and Minerals, and the Treasury Department. A consulting résumé for Sunny is attached.

The student component of the consulting team is represented by the principals of Coburg Consulting, a student run company comprised primarily of MBA candidates entering their final year of the program. Coburg Consultants Limited is currently working on a project to implement an initiative entirely in keeping with the spirit of this project - the Atlantic Canada Shippers’ Profile Directory. Coburg Consultants is conducting the survey and compiling a database on behalf of the Halifax Port Authority. The directory produces a profile of all the importing and exporting companies using the Port of Halifax. The profiles provide the customers of the Port with an electronic database with query capabilities regarding the international importers and exporters. The database provided the Port Authority with a powerful tool for the strategic development of their long-term marketing plan and as a key resource for their customers. The tool is being adapted for web access and continuous updating.

Four individuals from the company are expected to participate in the project:

  • Ted Loucks – An engineer by training and experience, Mr. Loucks is very familiar with the demands of consulting practice and the disciplines of the project environment. He has high levels of personal energy, permitting him to maintain excellent academic performance while making significant contributions to the community through his extra-curricular commitments. His competence across a wide range of activities accounts for the extensive award section to his résumé.
  • Brian Trainor – Mr. Trainor is a commerce graduate who is working on his certification as a Chartered Financial Analyst in addition to his MBA studies. His award as entrepreneur was no accident – he has substantial personal experience. He was a founding shareholder of an organization with the mandate for consolidating purchasing contracts – just the kind of value added service that trade organizations can provide their members through e-business practices.
  • Marc Hamilton – Mr. Hamilton has an undergraduate degree in business administration, and in the process earned a number of major awards. He has experience in securities administration and excellent personal computing skills. These skills were strong enough that he created application software for bond settlement subgroups, facilitating daily movement of cash and securities, improving speed and accuracy. He has had leadership responsibilities in other information system development initiatives.
  • Jyoti Kingra – Ms. Kingra has an undergraduate degree in political science and work experience in the banking sector. She has a strong research orientation with good analytical skills using Microsoft Office Suite and IE Explorer. She is also multi-lingual.

The résumés of these consultants are attached. Coburg Consultants has access to a number of other prospective collaborators, such as MBA students with a variety of linguistic backgrounds. The organization may draw on these resources to deal with web sites in other languages.

Of the estimated 508 hours of work in the above work plan, approximately 10% have been allocated to Sunny Marche, who will manage the project and provide quality assurance on deliverables. The rest of the hours are allocated to the working consultants on the project.

Table 2 – Project Budget Allocation

Cost Category / Cost Estimate / Comments
Principal investigator / 17,500 / Marche – approximately 100 hours
Coburg Consultants / 24,600 / Loucks, Hamilton, Trainor, Kingra – approximately 970 hours.
Project costs and overheads / 8,000 / Long distance, report preparation, etc.
Travel (October 17) / 2,000 / Airfare return (Halifax – Toronto, accommodation, taxis, etc.

Total

/ 52,100

The total proposed cost (including expenses) for the project is $52,100 plus appropriate HST as applicable. The per diem for Dr. Marche is approximately 40% of his regular public sector rates. This significantly reduced rate is provided on the assumption that he may use the results of the survey data for academic purposes, including publication. Any publications coming out of this effort will acknowledge Industry Canada’s sponsorship of the work. The hourly rate for Coburg Consultants is approximately $25 to cover their overhead and consulting salaries. If any of the above consultants is working next year at this time as operating staff for a Canadian consulting firm, they will bill five to six times this amount. In summary, we believe this proposal has an outstanding value proposition.

With respect to the commercial arrangements, we propose to invoice Industry Canada on a progress basis (i.e., monthly) on the basis of time and expenses incurred.

Conclusion

We believe that the proposed team has the experience, intelligence and energy to do an outstanding job for Industry Canada, and by extension for small and medium sized enterprises throughout Canada. The cost effectiveness of the proposed work plan is without precedent in my experience. We look forward to this work with great enthusiasm.

Yours truly,

Sunny Marche, Ph.D., CMC

This proposal has been prepared by a Certified Management Consultant (CMC). The CMC is a profess-ional designation whose use is governed by law for the purpose of protecting the public interest. CMCs must abide by a stringent code of ethics that include upholding client confidentiality and assurance of expertise suitable to the engagement. Consultants who earned their CMC designation have an undergraduate degree from a recognized university or equivalent experience. They must have worked as a consultant for a minimum of three years and a pass eight exams covering management and consulting experience.

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